Sources within the Tanzania Mines, Energy,
Construction and Allied Workers Union (Tamico) branch at the mine said most of
the workers who had been laid off took loans from various banks and financial
institutions.
Banks face an uphill task of
recovering an estimated Sh30 billion in loans following the sacking of 2,000
workers at Bulyanhulu gold mine in Shinyanga Region.
Sources within the Tanzania Mines, Energy, Construction and Allied
Workers Union (Tamico) branch at the mine said most of the workers who had been
laid off took loans from various banks and financial institutions.
Bulyanhulu Mine spokesperson Asa Mwaipopo confirmed at the weekend
that 1,200 and 800 direct and indirect jobs, respectively, had been cut at
Bulyanhulu mine, one of three gold mines operated by the firm.
Tamico sources said the sacked workers were issued loans under the
salaried and other personal loan arrangements.
This could heighten anxiety within the banking sector which is
already grappling with high levels of non-performing loans.
The Monetary Policy Statement for June 2017 published by the Bank
of Tanzania (BoT) shows that non-performing loans increased to 10.8 per cent
during the year to April 2017 from 8.2 per cent recorded in the previous year.
Mr Mwaipopo said during a function to bid farewell to the first
group of retrenched workers that only 150 workers will be retained at
Bulyanhulu.
Tamico said through its representative at Bulyanhulu that the
decision to slash the workforce at the mine had caught the body by surprise.
According to company reports, the laid-off workers at Bulyanhulu
account for almost 66 per cent of Acacia Mining direct employment.
Other effects of mine closure
The scaling down of operations at the mine would also have other
significant to both the local and national economies, The Citizen has
established.
Jobs
The axed 2000 jobs pose a burden to the economy and leave about
10,000 of their dependents without livelihoods. Dozens of suppliers to the mine
who would have to scale down their operations might be forced to reduce workers
adding to the number of jobless people in the area.
The Total Economic and Tax contribution report 2016 compiled by by
Ernst and Young indicated that Acacia’s total direct, indirect, and induced
economic contribution in Tanzania in 2016 included more than 36,000 jobs that
produced about $339 million (about Sh750 billion) of labour income.
The National Union of Mine and Energy Workers of Tanzania (Numet)
said about 500 workers among laid off workers were their registered members who
were contributing over Sh7 Million to the union monthly.
Numet’s country general secretary, Mr Nicodemus Kajungu, told The
Citizen yesterday that his union has 4,500 registered members and Acacia
employee formed a bigger part of Numet membership.
“Despite losing revenue from the workers we will also lose manpower
as the major union drive,” he said. “Our spending at the union remains apparent
as income from the workers is decreased.”
Reduced taxes
The central government and the local authorities would receive less
taxes, royalties and fees as Acacia scales down operations.
About 75 per cent of Msalala District Council’s annual revenue has
come from Acacia.
Total tax contribution in 2016 in terms of direct, indirect taxes
paid by Acacia, its employees, suppliers, and other affected businesses, was
estimated at $214 million (about Sh470 billion).
The 2016 showed that Acacia’s total government revenue contribution
per employee was more than 100 times higher than the national average.
No more good spenders
The reduction in production and the retrenchment will also affect
the local economy, in terms of spending in villages and towns surrounding the
mining site.
The booming ‘gold townships’ of Kakola and Kahama are expected to
be highly affected.
Shrinking CSR
Although Acacia General manager Asa Mwaipopo has announced that the
company Corporate Social Responsibility will remain as planned, there is fear
that the effect will be seen in the long term.
Currently, the company has said is implementing various CSR programmes
in Msalala, Nyanghwale and Kahama councils.
Acacia’s annual CSR spending is estimated at $11 million (Sh28
billion). Of this, over $6 million was spent in education, health,
infrastructure, water and sanitation, primarily in the communities surrounding
Acacia’s mines.
Exports earnings
The scaling down of gold production will affect export earnings
because gold is one of the major exports.
The Bank of Tanzania (BOT) Monthly Economic Review for June 2017,
shows that Tanzania exported gold worth $1.5 billion in the year ending May
2017, higher than $1.22 billion exported during the year ending in May 2016.
In 2015, gold exports accounted for $1.3 billion of Tanzania’s
exports, representing more than 90 per cent of the country’s mineral exports.
The Citizen
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